"A good game of poker" is how one of the parties described talks last week between mobile network operators Vodafone and O2 and communications minister Stephen Carter.
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Carter is trying to persuade the operators to give up frequencies they hold in the 900MHz band for so-called 2G mobile telephony. This would enable Ofcom to bring the allocation of the UK's spectrum in line with European guidelines.
More importantly, it would let mobile network operators extend broadband services to rural areas. This is a key part of Carter's proposed Digital Britain project to make a broadband connection of at least 2Mbps available throughout the country.
A Vodafone spokesman said the talks were in their early stages but had been "encouraging".
"We are pleased that we are being asked to give up only 2x2.5MHz rather than the 2x7.5MHz of the original proposal of last year," he said.
He said he did not want to disclose his hand, but did not deny that Vodfone might trade some spectrum it holds now for first choice of the spectrum that is becoming available for high-speed mobile applications. This includes frequencies in the 800MHz, 1.8GHz and 2.6GHz bands, he said.
He said that Vodafone was in favour of Ofcom's proposal to let network operators trade spectrum licences between themselves where there was a competitive market.
O2 said in a statement, "We agree with the government that it is in the best interests of everyone to reach an industry-agreed solution provided it does not affect our customers or commercial interests."
An O2 spokesman said it would concentrate on talks with Kip Meek, chairman of the Broadband Stakeholders Group and the government's independent spectrum broker, rather than the Ofcom consultation.
"There is no date in the diary as yet, but we expect to meet Kip Meek soon," she said.
A spokesman for the Department of Business, Enterprise and Regulatory Reform declined to comment on the talks, saying "We are not going to give a running commentary on the talks."